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Three years in, Oregon's economic recovery makes some gains, faces long path ahead

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Jenn Farrington started working at Raven and Rose when the downtown Portland restaurant opened in January. She balances her bartending job with school. OregonÃ¢ÂÂs leisure and hospitality industry is among the fastest expanding, with most of the growth coming from restaurants, bars and related businesses. ÃÂ
(Beth Nakamura/The Oregonian)

Take a look at Pacific Pie Co., and see a sliver of Oregon's economic recovery.

The Southeast Portland bakeshop will open a second location across the Willamette this summer and add 20 to the three dozen it already employs.

Restaurants like Pacific Pie are the big drivers in one of the state's fastest-growing sectors -- leisure and hospitality, where jobs now surpass pre-recession levels. Same goes for the professional and business services sector.

But industries hardest hit in the Great Recession, namely construction and finance, are lagging. And government jobs continue to decline.

This is a snapshot of Oregon's economy, as detailed in the most recent jobs report out Tuesday. It outlines a recovery three years in the making, and one that's far from complete.

View full sizeSabrina Heasley moved from Amity in January and found a hostess gig at Raven & Rose. Food service businesses have added 6,600 jobs over the past year a sign of consumer spending is coming back.
Beth Nakamura/The Oregonian

The economy is slowly working its way back, said John Mitchell, an economist who runs a private consulting firm. "If you step back and look across the country, what you're seeing in this Oregon data is basically what you're seeing across the country."

The numbers reflect broad-based gains across much of the private sector, and recent revisions show that Oregon's job growth last fall was stronger than originally thought.

A full recovery is still another two years off, economists say. But industries tied to consumer spending and population growth are benefiting now.

The state's leisure and hospitality industry, which includes hotels and other entertainment, employs 179,100; it added 9,300 jobs in the past year. The 5.6 percent clip makes it one of the state's fastest growing sectors.

The stronger-than-expected hiring signals that household spending is bouncing back, state economist Mark McMullen said. The pace will ease as households begin saving more, he said.

Twigs Bistro and Martini Bar opened its ninth restaurant in Bridgeport Village in April, hiring about 85 part- and full-time workers. Sales are up at each location, according to Jeff Blackwell, president and chief executive of the Spokane-based chain. Traffic started climbing six months ago, he said, prompting Twigs to add more staff.

Sarah Curtis-Fowley, who co-owns Pacific Pie, said the time felt right to open a second store. The Northwest 23rd Avenue location is under construction and slated to open in August. She doesn't expect any trouble finding staff; a single job posting can generate upwards of 250 responses, she said.

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Food service businesses like Twigs and Pacific Pie added 6,600 jobs in Oregon in the past year, or more than two-thirds of leisure and hospitality's growth.

What the numbers don't show are wages, said Nick Beleiciks, a labor economist at the Oregon Employment Department. Leisure and hospitality jobs pay an average $18,000 a year, less than half of Oregon's average wage.

But higher paying industries are also on the rise, he said. Those in the professional and business services sector take home about $52,000 a year. That workforce now numbers nearly 200,000 in Oregon.

Average hourly pay, though, has stalled. In April, it was $22.36, up 6 cents from a year ago.

Oregon's unemployment rate fell from 8.8 percent to 8.0 percent over the same time frame. That's the lowest it's been since October 2008 and is a half percentage point higher than the U.S. average.

A broader economic metric that includes marginally attached workers and others who can't line up enough hours also fell in April. Oregon's U-6 "underemployment" rate was 16.3 percent, down from 16.8 percent in March. It remains among the highest in the U.S., and nearly 2.5 percentage points above the national average.

In all, about 151,000 in Oregon were out of work last month, 20,000 fewer than in April 2012.

At least some of the decline is tied to the state's rising number of working-age adults opting to leave the labor force.

In February, the percentage of Oregonians in the labor market fell to a new low, and it's continued to lose ground. In April, it declined to 61.9 percent, its lowest point since the state started tracking the metric in January 1976, said David Cooke, another labor economist for the state.

Also Tuesday, the Employment Department said it will revise jobs data every three months, instead of annually. The shift will offer more up-to-date historical data, Beleiciks said.